Transactions generate investment capital of $12.3 million to the Company unlocking significant value from existing assets

TORONTO, ON / ACCESSWIRE / January 16, 2024 / Global Food and Ingredients Ltd. (TSXV:PEAS) ("GFI" or the "Company"), announced today that it has entered into definitive agreements relating to the previously announced transactions to raise approximately $11.8 million through an investment in equity and debt in its pet food division, Big Sky Milling Inc. ("Big Sky") (the "Pet Food Transaction") as well as a further injection of $0.5 million in the Company's core ingredients division to fund its business (the "Subordinated Loan", and together with the Pet Food Transaction, the "Transactions") by 35 Oak Holdings Ltd. ("35 Oak"), for a total expected investment of approximately $12.3 million.

The proceeds from the Transactions will be used by the Company's core ingredients division to refinance existing loans and unlock liquidity to invest in further growth of the operation. Under the terms of the Pet Food Transaction, the Company's core ingredients division will enter into a management services agreement with Big Sky which will result in recurring annual revenue of a minimum of $180,000.

The Transactions are expected to close on or about January 31, 2024.

Pet Food Transaction
Under the Pet Food Transaction, the Company will transfer all of the assets and liabilities associated with the pet food ingredients business to a recently formed subsidiary, Big Sky. As part of the Pet Food Transaction, the Company will raise $3.45 million through the sale of 49.9% of common shares of Big Sky (the "Subscription Proceeds") to 35 Oak.

In addition to the Subscription Proceeds, Big Sky will raise a two-year committed $10.0 million debt facility consisting of two tranches, including a revolving credit facility of up to $5.0 million and a term loan in the amount of $5.0 million (collectively the "Pet Food Loans"). The Pet Food Loans will be issued by 35 Oak, bear interest at a rate of Canadian Prime Rate plus 3.80% and be secured by a first position general security agreement over all of the assets of Big Sky and a first ranking mortgage on the pet food facility. The Pet Food Loans will have a term of two years from the closing date and be payable in full at maturity with interest payable monthly.

As consideration for providing the Pet Food Loans, the Company will issue 35 Oak non-transferrable warrants (the "Warrants", and each, a "Warrant") to purchase an aggregate of 3,250,000 common shares of the Company (each, a "Common Share"), each Warrant entitling 35 Oak to acquire one Common Share at an exercise price of $0.20 per share for a period of two years following the date of issuance. The Warrants will include a forced exercise feature in the event that the closing price of the Common Shares on the TSX Venture Exchange (the "TSXV") reaches or exceeds $0.40 for 20 consecutive trading days. The terms and issuance of the Warrants are subject to approval of the TSXV.

Subordinated Loan
Concurrent with the close of the Pet Food Transaction, 35 Oak will issue a $0.5 million Subordinated Loan to the Company's core ingredients division. The Subordinated Loan will have a term of one year from the date of issuance, accrue interest at a rate of 15% per annum and be payable in full at maturity. The Subordinated Loan will be secured by a third position general security agreement over all of the assets of the Company's core ingredients division behind its senior lenders.

The Transactions are subject to customary closing conditions and receipt of regulatory and financing approvals, including the approval of the TSXV.

The Transactions constitute "related party transactions" of GFI, within the meaning of Multilateral Instrument 61-101 - Protections of Minority Security Holders in Special Transactions ("MI 61-101") as 35 Oak is a shareholder of the Company. The Company determined that the Transactions are exempt from the formal valuation and minority approval requirements of MI 61-101 in reliance of the exemptions set forth in sections 5.5(e) and 5.7(1)(c) of MI 61-101, respectively, as the Transactions are supported by a control person of the Company in the circumstances described in section 5.5(e) of MI 61-101.

About GFI

GFI is a fast-growing Canadian plant-based food and ingredients company, connecting the local farm to the global supply chain for peas, beans, lentils, chickpeas and other high protein specialty crops. GFI's vision is to become a vertically integrated farm-to-fork plant-based company providing traceable, locally sourced, healthy and sustainable food and ingredients. GFI is organized into four primary business lines: Core Ingredients, Value-Added Ingredients, Plant-Based Pet Food Ingredients and Downstream Products. Headquartered in Toronto, GFI buys directly from its extensive network of farmers, processes its products locally at its four wholly-owned processing facilities in Western Canada and ships to 37 countries across the world.

Disclaimer
Neither the TSXV nor its Regulation Service Provider (as defined policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

Forward-Looking Information
This press release may contain certain forward-looking information and statements ("forward-looking information") within the meaning of applicable Canadian securities legislation, that are not based on historical fact. Forward-looking statements include without limitation statements containing the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "continue", "estimate", "forecasts" and other similar expressions. Forward-looking information in this press release includes without limitation statements relating to the Pet Food Transaction the Pet Food Loans, the Subordinated Loan, including the terms and conditions, closing date and impacts thereof. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. GFI undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of GFI, its securities, or financial or operating results (as applicable). Although GFI believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond GFI's control, including the risk factors discussed in GFI's annual information form for the year ended March 31, 2022, which are incorporated herein by reference and are available through SEDAR at www.sedarplus.com. The forward-looking information contained in this press release is expressly qualified by this cautionary statement and is given as of the date hereof. GFI disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

Contact Information
For further information, please contact:

GLOBAL FOOD AND INGREDIENTS LTD.
Bill Murray
Chief Financial Officer
T: 416-840-6801
E: bill.murray@gfiglobalfood.com
W: www.gfiglobalfood.com
S: https://linktr.ee/gfi.globalfood

SOURCE: Global Food and Ingredients